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Old August 3, 2011, 03:41 PM   #1
Hardcase
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Being "in the business"

Sorry if I'm beating a dead horse, but I saw this tidbit in a link that was in another forum and it's something that I get asked about from time to time - what constitutes being in the business, when it comes to selling C&R guns. You know how the question goes.

The question was posed in the context of being a dealer in NFA guns, but I believe that the answer also fits the C&R realm, too. The long and short is that the answer is "it depends", but here's the full quote from the Prince Law Offices (http://blog.princelaw.com):

Quote:
The second issue raised during the panel discussion involved a deeper discussion of the definition of “engaged in the business” and the effect of the determination on a particular transaction. In general, the paraphrased legal sections pertaining to this definition discuss one who devotes time, attention and labor to some form of the industry (ie. manufacturer, dealer or importer) as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of firearms or ammunition. 18 USCS §921. Where one is engaged in the business, then one is required to have a federal firearms license and follow the various regulations and laws pertaining to transactions relative thereto. Much of the discussion centered on hypothetical scenarios leading this author to the conclusion that each determination is very fact specific. The BATF focused on at least two criteria in its analysis of whether one fits under this definition. The first would appear somewhat obvious – the frequency and volume of the transaction in question. The more often one is involved in these types of transactions; the more likely it is to be found to be engaged in the business. The second criteria that made only a brief appearance in the discussion was an examination of the terms of the financial transaction at issue in the factual scenario. For instance, where a US citizen uses her own funds to purchase the NFA firearms, then sells those firearms to a buyer in the US or overseas making a profit on the transaction, the use of her funds to purchase the firearms – thus taking possession and ownership prior to sale – clearly places the individual under the definition of “engaged in the business”. Yet, if we take that same individual who brokers a deal for the purchase and sale of firearms from Country A to someone in Country B, and the only funds received by the individual is the commission from the sale (ie. no possession or ownership of the firearms in question), then the individual may not fall within the definition.
The italics are mine. I realize that this doesn't clear the air at all, but it does show that the ATF is aware that the question is being raised and is trying, in its own odd way, to provide an answer.
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Old August 3, 2011, 04:17 PM   #2
James K
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Another common definition of "being in business" is that one buys for the purpose of resale at a profit. If I buy a gun, don't like it and sell it, that is not dealing. But if a friend asks me to use my C&R license to buy a gun for him, that is dealing, since my only purpose in buying the gun was to sell to him. Buying more guns than would be reasonable for a real collector would also raise questions. What is that number? 5? 10? 100? 15,000? I don't know, but I suspect that buying more than 5 identical guns would interest some folks.

Actually, BATFE has admitted that they keep the definition of a "dealer" vague so they can play things by ear on a case-by-case basis. That is probably not a good way to enforce the law, but to some extent every cop and every prosecutor does exactly that at one time or another.

Sometimes, it depends on the circumstances. If I buy a gun on my C&R and sell it to my friend, no one really cares much. But if my friend uses that gun in a crime spree and commits suicide, the police are going to look for someone to arrest and prosecute, and I might be charged (and probably convicted) of being an illegal dealer.

Jim
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Old August 3, 2011, 04:40 PM   #3
rr2241tx
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You will definitely be suspect if you routinely have multiple tables at the local gunshow and maintain a constant stock of any type of firearms or ammunition. Repetitive orders for multiples of any type of firearm from a wholesaler will trigger a visit to inspect your books. If you are after something specific, it is much simpler to pay a premium and have the wholesaler sell you what you want the first time instead of buying and selling dozens of unselected firearms of the same type hoping to get what you want by blind luck.

Clearly, the absolute number of firearms sold is not the sole criterion since we all know that Pat Burns is "in the business" and yet she has no license and BATFE is allowing her to sell off her "collection". I think it would be hard to argue that she doesn't do it with the intent of making a living and spends considerable time, effort and attention to the enterprise.

Yet another example of unconstitutional laws selectively enforced by an illegal agency? Could be. I may be handicapped by the ability to read.
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